Amazon tax bill moves in Tennessee House

Amazon tax bill moves in Tennessee House

February 2nd, 2012 by Andy Sher in Business Around the Region

Employees working in the intake section sort merchandise arriving from trucks while inside of the Amazon distribution center at Enterprise South in Chattanooga, Tenn., on Thursday, January 5, 2012. The neighboring Chattanooga and Cleveland based Amazon distribution centers opened in the Fall of 2011 and employ between two and four thousand workers depending on the season.

Employees working in the intake section sort merchandise...

Photo by Dan Henry /Times Free Press.

NASHVILLE - Legislation requiring to begin collecting state and local sales taxes on goods the Internet retailer sells to Tennesseans starting in 2014 easily cleared its first hurdle Wednesday in the House Budget Subcommittee.

The move is expected to generate an additional $22.8 million for state coffers and $9.6 million for local governments beginning in the 2014-15 budget year. The House Finance Committee's budget subcommittee approved the deal, which Amazon agreed to, on a voice vote.

Amazon director of global public policy, Paul Misener, later said the legislation "allows us to bring 3,500 full-time jobs and $350 million in capital investments to the state. And with Tennessee's leadership, we're now in position to actually seek federal legislation which will resolve the sales tax question forever."

Asked about a legislative analysis outlining the taxes Amazon will be paying -- and which it is excluded from paying until Jan. 1, 2014 -- Misener told reporters, "I don't have that figure."

He stressed Amazon's investments in the state, which include two giant distribution centers already operating in Hamilton and Bradley counties.

The bill exempts Amazon from paying state sales taxes until 2014 unless Congress acts sooner to approve federal legislation that would require all Internet retailers without a physical presence in states to begin collecting sales taxes.

The state legislation from Gov. Bill Haslam was intended to satisfy legislative critics of the Amazon deal, which originally would have permitted Amazon not to collect state sales taxes in perpetuity.

The Amazon bill has two other House committees to clear before going to the House floor. The bill comes up next week in a Senate committee.